Federated Learning

Federated Learning (FL) is a decentralized machine learning approach that enables multiple parties to train a shared model without transferring raw data. Instead of pooling sensitive information into a central location, each participant trains the model locally and only shares model updates (e.g., gradients or weights) with a central aggregator. This allows organizations to collaborate on AI-driven initiatives while preserving data privacy.

The federated learning process allows data science teams to train powerful deep learning models while preserving data security and ownership, making it an essential tool in privacy-preserving AI.

How Does Federated Learning Work?

Federated Learning allows access to a wide variety of data sets without requiring direct data exchange, whether between users and a central server or between organizations. It operates in a federated setting, where multiple participants contribute to a global machine-learning model without exposing their local dataset.

The Model Training Process

Instead of sending raw data to a central server, each edge device or organization trains a model locally using its own data. Once training is complete, only the computed model updates (e.g., gradients or weight adjustments) are shared with a central aggregator.

The central server collects these updates from multiple participants and combines them using an averaging technique (e.g., Federated Averaging). The aggregated or global model is then redistributed to participants, improving overall accuracy while preserving data privacy. This iterative process, known as a Federated Learning Round, can be repeated as required to come up with the most optimal performance.

The key advantage? Organizations and devices can benefit from shared AI models while keeping their intellectual property and sensitive data protected.

What is Private Federated Learning?

Private Federated Learning (PFL) builds on standard Federated Learning by incorporating advanced privacy-preserving techniques to protect not only raw data but also model updates from exposure.

While standard FL prevents the need to share local datasets, there are still risks associated with exposing model parameters, as attackers can potentially reconstruct original training data through inference attacks.

Private Federated Learning prevents this by introducing cryptographic security layers such as:

  • Differential Privacy (DP): Adds statistical noise into updates, ensuring that user data cannot be reconstructed from gradients.
  • Secure Multi-Party Computation (SMPC): Encrypts updates so no single party can access the full model.
  • Homomorphic Encryption (HE): Protect the intermediate weights and perform aggregation on encrypted weights. 
  • Trusted Execution Environments (TEEs): Isolate computations in secure hardware environments to prevent unauthorized access. Also used to protect the intermediate weights and perform aggregation inside the secure enclave. 

Both FL and PFL are valuable in highly regulated industries such as healthcare, finance, and cybersecurity, where data security and privacy concerns restrict sharing.

Applications of Federated Learning

  • Healthcare: Hospitals and medical institutions can train AI models for diagnosis and treatment recommendations without sharing patient data.
  • Financial Services: Banks use FL to improve fraud detection and risk analysis without exposing client transactions. Risk assessment models also improve based on decentralized data sources.
  • Cybersecurity: FL enhances threat detection systems by training on distributed security logs.
  • Retail & E-commerce: Personalizes recommendations without exposing customer preferences.

Benefits of Federated Learning

Stronger Data Privacy: Sensitive information never leaves local devices, reducing the risk of data breaches.

Regulatory Compliance: Helps businesses meet GDPR, HIPAA, and other data protection laws by minimizing direct data sharing.

Lower Bandwidth Costs: Since only model updates are shared, network traffic is reduced compared to traditional centralized learning.

Improved AI Performance: Enables model training on decentralized data sources, which can improve generalization across diverse datasets.

Personalized Learning: Models can adapt to local data distributions, improving accuracy without compromising privacy.

Drawbacks of Federated Learning

Computational Overhead: Devices must have sufficient resources to train models locally.

Data Heterogeneity: Different participants may have highly variable data, making model convergence challenging.

Security Risks: Federated learning is still vulnerable to model poisoning and adversarial attacks.

Limited Communication Efficiency: Frequent model updates can create network strain.

Duality Federated Learning: Secure, Private, and Scalable

That said there are platforms such as Duality that address those concerns by providing secure and private federated learning. We take Federated Learning to the next level by integrating advanced Privacy-Enhancing Technologies (PETs) into AI-driven collaborative learning.

With Duality SFL, enterprises in finance, healthcare, and AI research can leverage federated learning across different organizations while ensuring full regulatory compliance and security.